Deutsche Bank Increases Price Target and EPS on Saks

Deutsche Bank has increased its price target and EPS estimate on Saks SKS following 3Q10 results. In 3Q, SKS's EPS was $0.06, ex-items, which was double the consensus estimate. Q3:10 sales increased 4.3% on a +5.7% comp compared to -10.1% LY. Deutsche Bank writes, "Saks currently trades at 8.0x our FY11 EBITDA est. of $280MM, a premium to the dept. store CY EBITDA multiple of 6.9x. We believe the improving sales trends at Saks, gross margin initiatives, expense management & OFF 5th expansion will drive EBITDA to $280MM in FY11. Our $13 PT is based on a weighted average of our bear, model and bull case scenarios and a small weighting on our NAV value of $7.20/ share." SKS closed Tuesday at $11.16.